From the later decades of the 20th century, markets, political and social systems, and cultural norms have become increasingly linked globally. This phenomenon is known as “Globalization”. Although the process of global economic integration is most frequently described using this term, social policy, and international relations issues can also be discussed.
The process by which a firm or other organization starts to function on a global scale or broadens its influence in the countries where it does business is now referred to as “Globalization”, especially in modern economics. Globalization has numerous proponents since so many people see its advantages.
Most people globally can now take advantage of the benefits of contemporary technologies developed on the other side of the planet thanks to globalization. Globally, individuals use Apple and Google’s respective smartphones, and internet innovations like Zoom have proved essential to the survival of many businesses by enabling international connections and business transactions.
Globalization gives businesses a competitive edge across the board. Companies can lower operational costs by outsourcing their manufacturing, purchasing raw materials more affordably due to reduced or eliminated tariffs, and, most importantly, having access to millions of new customers. Globalization is a social, cultural, political, and legal phenomenon.
India has experienced significant and practically immediate repercussions of globalization. Developed countries have put pressure on developing countries to liberalize trade and give corporations more altitude to level the playing field for multinational corporations there. The International Monetary Fund (IMF) and the World Bank were established to support these countries in this endeavor. Liberalization gained a solid grip in economically underdeveloped areas of nations like India by gradually cutting excise rates on electronic goods.
Free trade, made possible by the removal of import restrictions and export subsidies, has made the untapped Indian market more alluring to global investors. These changes had a significant impact on the industrial, financial, and agricultural sectors of the nation. Following are the four main causes that have accelerated India’s globalization:
Modern technology has significantly improved the ease of communication. Due to the expansion of social media in the modern world, distance relationships are no longer a problem. Businesses can easily communicate in real time across international borders.
Due to India’s delayed adoption of new technologies, many previously well-playing professions have vanished. They have been replaced by lower-paying positions that call for fewer skills but more responsibilities, like communication, interaction, and analytical capabilities. As a result, there are more jobs available.
Barriers to the free flow of capital between economies have gradually been removed during the past few decades. Businesses now have a better probability of transferring and receiving money as a result. Also, this breakthrough has helped to further integrate financial markets all around the would, including India.
India has been able to participate in and contribute to the global market, which has allowed it to benefit from globalization. Companies may now complete transactions in considerably less time and on a far greater scale than ever before. Businesses can employ competent labor remotely and handle managing a global payroll more easily.
Multinational businesses (MNCs) are becoming more prevalent, which has paved the way for emerging nations to prosper on a global basis. As shipping has become easier, nations like India have become important hubs for MNCs looking to access more cost manufacturing. Successful business practices have expanded globally thanks to MNCs’ widespread operations. MNCs interact with local communities more frequently as a result of their global resource sourcing and global market presence.
These characteristics have facilitated economic liberalization and globalization, transforming the world into a “global village”. As people from many cultures interact more regularly, they share concepts, traditions, and even culinary delights. MNCs have prioritized India in recent years, and as a result, the nation is getting significant investments from these companies as they set up research and development centers there.
Tariff and non-tariff barriers were reduced everywhere in the world in the years following the World Trade Organization’s (WTO) establishment in 1994. The WTO is the sole organization on the global stage that regulates trading. Its main objective is to make it easier for trading partners to conduct unhindered, organized, and unrestrained transactions.
Many nations have signed free trade agreements as a result of the WTO’s creation, allowing individuals and businesses to profit from the many advantages of globalization. There are greater opportunities for MNCs and governments around the world to invest in emerging economies and boost trade. As a result, the global market has expanded its diversity, and WTO members may now access a wider range of skills.
Urbanization and globalization have had a significant impact on Indian society. The choices made by policymakers have a significant impact on the structural underpinnings of the economy. The government’s set and implemented economic policies had a significant impact on employment, income savings, and investment levels.
The proliferation of international pop culture is one of globalization’s most notable consequences for Indian culture. The country’s culture, society, government, and economy have all been significantly impacted. Yet, economic unification is the single most crucial component in turning a national economy into a global one. These are some of the biggest impacts of globalization that India is currently experiencing:
Globalization has enabled India and its people to enjoy more consumer goods than ever before, just like other nations around the world. Nowadays, consumers have access to a wider range of goods from a wider range of companies, including those made not just locally but globally. The average Indian customer can now get the newest consumer electronics at a much faster rate and for a much lower price because of the improved ease of shipping and delivery.
There has been a small increase in employment prospects as a result of MNCs entering the Indian market. Many new jobs were created as a result of increased exports brought on by the nation’s relative cost advantage in industry. Fewer restrictions on money transfers have also aided in the growth of the labor market. Nonetheless, the advancement of contemporary technology and the rise in demand for highly qualified, remote workers have also improved job possibilities in India.
In the wake of globalization, incomes in India have increased due to the high level of competence and experience offered by foreign corporations. A change in the management structure led to the emergence of not only opportunities but also higher compensation. India’s recent economic rebound and expansion, which notably improved wages and other benefits for workers, allowed many people to escape from extreme poverty.
A once-in-a-lifetime opportunity for growth and expansion presented itself to foreign firms with the opening up of the Indian market to international trade. The second-most populated country in the world was suddenly open for business. Additionally, the advantages of this discovery are being felt today, including:
India gained access to the international market as more nations opened their borders to it. India’s rising globalization, which has opened up the country’s sizable consumer market to them, is drawing in interested overseas corporations. On the other hand, Indian businesses now have access to a wider variety of technologies and the chance to build specialized skills.
More foreign capital entered the nation and its people as a result, both in the form of direct investment and portfolio investment. The result was a sharp increase in the import-export industry. Multinational firms had access to hundreds of millions of new clients and potential employees right away, increasing their capacity and dominance in the market.
Globalization has made India a top choice for business expansion now more than ever. Businesses can increase their economies of scale and specialization, lower unit production costs, and increase their profit margins by extending their reach into new markets.
Access to internet infrastructure has become easier as globalization has grown quickly. This has improved India’s access to high-quality education by providing current knowledge from a range of businesses and areas. The importance of higher education in the nation and the demand for specialized training within it has expanded as a result of this trend, which has also considerably improved both India’s literacy rate and the demand for skilled professionals inside the nation.
New employment opportunities have been created as a result of the influx of foreign companies and general economic growth. These jobs are skewed toward the service industry, whose tremendous growth has presented challenges for those of us with the least qualifications. Because job growth fell behind economic progress throughout the past ten years, it was known as the “jobless growth” decade.
Corporations should consider entering the Indian market, specifically for manufacturing purposes, to reduce overall risk. The likelihood of supply chain interruptions has decreased with the development of several hubs around the globe. Even if one link in the supply chain is delayed, the entire system won’t be affected.
Also, India offers a diverse export market that attracts foreign investors. According to the 2019 Economic Report of India published by the OECD, the South Asian nation has increased its exports and started providing services to new markets and countries. The country’s exports are quite diverse, and its exports to emerging markets are growing quickly. This diversity highlights the adaptability of the Indian economy. Also, it lowers the risk of unfavorable outcomes, such as a decline in sales as a result of weak demand in a particular market or for a certain product.
The improved standard of living Indians now enjoys may be the biggest benefit and effect of globalization in India. The onset of globalization has improved India’s living standards and economy. The purchasing patterns of people, particularly those affiliated with MNCs, act as early markers of this transition. Due to globalization, Indians now have access to more advanced technologies, both in consumer products and other industries like medicine, as well as higher educational standards and, ultimately, higher earnings.
The idea that globalization is always beneficial to us is untrue. It has a wide range of effects on us. However, it also has some drawbacks. Which are:
Due to increased specialization and trade, globalization may result in greater inequality around the world. Trade and specialization increase per capita income, but they can also lead to relative poverty.
We will use an example to show this. The United States is home to every dominant MNC on the globe. For the assembly or production of their products, each of these businesses purchases labor at a lower cost from developing or poor nations. Africa, China, and India are excellent examples of this. These nations have higher employment rates, although they lag behind more industrialized nations.
The rate of unemployment may rise as a result of globalization. How is it possible that individuals are getting work there? This is the justification.
Due to globalization, more affordable, higher-skilled labor is required. But, countries with relatively weak institutions are unable to produce highly competent workers. As a result, the nation’s unemployment rates are rising.
When numerous international corporations make significant investments in emerging nations, they hire workers from those nations. Sometimes, their salaries are significantly lower than those in other wealthy nations. Also, there is very little demand for these workers in wealthy nations. Also, they face the possibility of losing their jobs as a result of the global economic crisis.
The value ratio between the commodities and services that a nation exports and imports is referred to as the trade balance. Any country can now trade with any part of the globe because of globalization.
Because of this, emerging nations sometimes rely heavily on wealthy nations for their imports of goods, despite having a lower export capacity than imports. There has been a trade imbalance.
So, a country’s import and export of products and services have different values, which is referred to as a trade imbalance. A trade deficit is another name for it. Competitors of developed nations might exacerbate trade imbalances.
Globalization has accelerated industrialization. Industrialization promotes economic development but also has a negative impact on the environment. Globalization ravages the environment and seriously damages us.
Let’s look at the example to understand. The largest soft drink manufacturer in the world is Coca-Cola. This business uses a lot of water to produce soft drinks. A Coca-Cola bottle factory in Uttar Pradesh, a state in northern India, was shut down by a government order due to excessive water use, according to local farmers.
Although there’s not much groundwater in North India, it is used extensively for an MNC’s benefit, which is highly harmful to local agriculture.
The Coca-Cola plant in Kerala, a state in southern India, was also shut down as a result of the pollution of the water provided to the nearby residents.
MNCs also heavily exploit the natural resources of various nations for their own advantage.
Various chemical industries pollute the soil, water, and air, which is particularly bad for human health.
The globalization of the Indian economy has improved the state of the international economy. India’s economy has expanded as a result of the 1990s economic liberalization, but it still confronts challenges from strict business regulations, widespread corruption, and pervasive poverty. India is a fantastic place for strategic investment and expansion since it provides quick access to enormous pools of consumers and labor, giving international enterprises a considerable competitive advantage.
The list of advantages of globalization can be easily expanded, as seen in the discussion of its advantages and disadvantages above. There are certain drawbacks, though. Critics claim that the impoverished did not gain anything from the process. Globalization did not stabilize the world economy and has not had a significant impact on environmental protection.
Only the developed world’s interests are served by the regulations created by the IMF, World Bank, and WTO. Particularly the self-interests of those nations. There is no place for developing nations in it. All of these nations’ perspectives on globalization center on a certain economic and social situation.
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